The Telegraph
Since 1st March, 1999
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Housing loan sops stay on firm ground

Calcutta, Feb. 28: Union budget 2003, with its host of goodies for the housing sector is a hit with the real estate industry.

Union finance minister Jaswant Singh has not only left the current sops intact, he has also proposed some new initiatives expected to give a fresh impetus to the industry.

“Besides direct sops, the budget has proposed several indirect measures which will certainly boost further growth and investment in the sector. The budget reflects the government’s sincere effort to fuel all round economic growth, right from infrastructure to power to stock market,” Harsh Neotia, managing director, Bengal-Ambuja Housing said.

NK Realtors managing director Shyam Agarwal said there was a fear among the common people that the government might withdraw the income tax benefits from the housing sector in line with the recommendations of the Kelkar committee, a move which would have also sounded the death knell for the industry.

“But we are happy that the government has understood the implications of such a move well in time. The common man as well as industry heaved a sigh of relief with the status quo on income tax benefits being maintained,” Agarwal said.

He added that over 90 per cent people take loans to buy a flat or build houses, yielding twin benefits— cheaper funds and income tax benefits.

What is more important is that profits on projects built on over one acre of land have now been exempted from taxes. “This will encourage housing companies to plough back the entire profits to other projects, fuelling future growth,” he said.

Agarwal further pointed out that the government has also taken an initiative to build up one crore houses with the help of the private sector.

“The government’s sincere efforts in this direction will pave the way for a great investment in the times to come,” he said.

Neotia feels the bonanza has come at the right time for the housing industry.

“Moreover, the government has proposed to invest over Rs 60,000 crore towards infrastructure development. It is certainly going to give a big impetus to the economy in general and the housing sector in particular,” he added.

The cement and steel sectors, which have direct links to the housing sector, have also been given wide ranging facilities which will boil down to benefit further real estate development, he said.

A senior executive of the Housing Development and Finance Corporation told that the budget will further help the company to fulfil its mission of providing houses to everybody.

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